From: Wayne Jervis
I am a professional money manager and I would like to encourage the SEC to push ahead with penny increment quotes for exchange traded options.
There are several inequities in the options markets which serve the broker community and disadvantage the investor community:
1) no other quoted security has the same %-of-security-price spread between bid and ask prices. These spreads can reach up to $0.20 or more per common-share-equivalent. Common stock spreads have compressed dramatically with the use of penny increment quotes.
As a result of these inequities and inefficiencies, I strongly believe that the SEC should push ahead with penny quoting to help level the playing field for options investors. I would encourage the SEC to look at leaders in this effort, like Interactive Brokers, as an indication that the SEC should push ahead more aggressively.
I would like to add that brokers have complained at every step along the way to improve investor inequities: decimization of common stocks, TRAC bond quotes, and now listed options. And yet there have been no tangible negative repercussions from these investor-friendly actions.